Online Betting Firms Gamble on Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) – Online sports betting wagering is growing in soccer-mad Nigeria mainly thanks to payment systems established by homegrown technology firms that are beginning to make online services more viable.

For years, mobile payments failed to remove in Nigeria as they have in countries such as Kenya, where Safaricom’s M-Pesa money transfers have fostered a culture of cashless payments.

Fear of electronic fraud and sluggish internet speeds have held Nigerian online customers back however sports betting firms states the brand-new, quick digital payment systems underpinning their websites are altering mindsets towards online transactions.

« We have seen considerable growth in the variety of payment options that are readily available. All that is definitely changing the video gaming area, » stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria’s business capital.

« The operators will opt for whoever is faster, whoever can connect to their platform with less issues and glitches, » he said, including that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That growth has been matched by an increase in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central bank and certified banks.

In 2016, there were 14 million web payments worth an overall 132 billion naira ($420 million). Transactions jumped to 29 million worth 185 billion in 2017 and in the first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of almost 190 million, rising mobile phone usage and falling information costs, Nigeria has actually long been seen as a fantastic chance for online organizations – once customers feel comfy with electronic payments.

Online gaming firms say that is happening, though reaching the 10s of countless Nigerians without access to banking services remains a difficulty for pure online retailers.

British online wagering firm Betway opened its very first African company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.

« There is a gradual shift to online now, that is where the industry is going, » Betway’s Nigeria supervisor Lere Awokoya stated.

« The development in the number of fintechs, and the government as an enabler, has assisted business to thrive. These technological shifts motivated Betway to start operating in Nigeria, » he said.

FINTECH COMPETITION

sports betting firms capitalizing the soccer craze worked up by Nigeria’s involvement worldwide Cup state they are finding the payment systems created by local start-ups such as Paystack are proving popular online.

Paystack and another regional start-up Flutterwave, both established in 2016, are offering competitors for Nigeria’s Interswitch which was set up in 2002 and was the primary platform used by services operating in Nigeria.

« We added Paystack as one of our payment options with no excitement, without announcing to our consumers, and within a month it shot up to the top most used payment option on the website, » said Akin Alabi, creator of NairabBET.

He said NairaBET, the country’s second greatest wagering firm, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative given that it was included in late 2017.

Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early phase funding in Silicon Valley’s Y-Combinator programme.

In December 2016, it raised $1.3 million from financiers consisting of China’s Tencent and Comcast Ventures in the United States.

Paystack, based in the mad Ikeja district of Lagos, stated the variety of monthly deals it processed increased from about 8,000 in early 2016 to more than 900,000 since June 2018.

« In early 2016 we were processing about $3,000 a month. Today we process well over $11 million every single month, » stated Emmanuel Quartey, Paystack’s head of growth.

He said an environment of developers had actually emerged around Paystack, creating software application to incorporate the platform into websites. « We have seen a development because community and they have brought us along, » said Quartey.

Paystack stated it allows payments for a variety of sports betting companies however also a wide range of organizations, from to transport companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program as well as endeavor capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million in 2015.

FOREIGN INVESTMENT

Shifts in Nigeria’s payment culture have coincided with the arrival of foreign investors intending to use sports betting wagering.

Industry specialists say the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the service is more developed.

Russia’s 1XBet and Slovakia’s DOXXbet have both established in Nigeria in the last 2 years while Italy’s Goldbet led the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian company launched in 2015.

NairaBET’s Alabi stated its sales were divided between stores and online however the ease of electronic payments, cost of running stores and ability for clients to prevent the stigma of gambling in public suggested online transactions would grow.

But regardless of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – said it was essential to have a shop network, not least because many customers still remain unwilling to spend online.

He said the company, with about 60 percent of Nigeria’s sports betting wagering market, had a comprehensive network. Nigerian wagering stores often function as social hubs where customers can watch soccer complimentary of charge while putting bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans gathered to watch Nigeria’s last heat up game before the World Cup.

Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a TV screen inside. He stated he began gambling 3 months earlier and bets up to 1,000 naira a day.

« Since I have actually been playing I have actually not won anything but I think that a person day I will win, » said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)